Capital efficiency in challenging business environments

James Hoare - 3 March 2016

Low oil prices have put pressure on capital expenditures. Mr Harry Brekelmans, Director of Projects and Technology at Shell, recently reflected on what might be done. The valve industry received special mention as an area in need of improvement.

About the author

James Hoare is a member of Valve World magazine's editorial team and is contributing to articles, interviews and reports for KCI publications.

In my editorial for the March issue of Valve World I reflected on the speech by the Director of Projects and Technology at Shell, Mr Harry Brekelmans, at the GE Oil & Gas Annual Meeting. He used the opportunity to address the problem of low oil prices putting pressure on the oil and gas industry and the subsequent to improve capital efficiency.

The event was held in Florence which, as Mr Brekelmans pointed out, is the home of the Renaissance. He used the opportunity to encourage the oil and gas industry to secure its future by undergoing a renaissance of its very own and singled out the valve industry as an area in need of improvement. He lamented the growing number of company specifications reflecting the responses to individual incidents and engineering preferences. On the topic of standards he said:

“Did you know there are hundreds of industry ‘standards’ for valves alone? As a result, we are defeating the purpose of an industry standard, as suppliers and service providers strive to meet the needs of their customers through bespoke solutions”.

The well-known Renaissance artist Leonardo da Vinci once said simplicity is the ultimate sophistication—I’m sure Mr Brekelmans would agree. His speech made an argument for scrutinising project scopes, efficient execution, deployment of affordable technology and most of all a transformation of the project supply chain. I was impressed by his willingness (or was it his determination?) to doggedly tackle the subject despite, even by his own admission, of it being an old topic.

His speech ended with a suggestion to “think bold and work together” and used the example of progress made on safety outcomes over the years: why can the same progress not be made in areas of captial efficiency?

What do you think needs to be done? What form of leadership is required to make progress moving forward?